The pace of seasonally adjusted existing-home sales in the U.S. rose 1.4 percent from 4.90 million in September to a 4.97 million pace in October, up 13.5 percent from the 4.38 million unit pace recorded in October 2010.
Total housing inventory at the end of October fell 2.2 percent to 3.33 million existing homes actively on the market, an 8.0 month supply, down from an 8.3 month supply in September and down from a 10.5 month supply in October 2010.
While demand appears to have increased, and supply appears to have declined, the median sale price for existing-homes was down 4.7 percent year-over-year in October to $162,500 as distressed sales accounted for 28 percent of sales volume, down two points from last month, down six points year-over-year.
Existing-home sales in the west increased 4.4 percent from September to October, up 15.5 percent on a year-over-year basis on a median sales price that’s 1.6 percent lower.
∙ October Existing-Home Sales Rise, Unsold Inventory Continues to Decline [realtor.org]
this is not surprising. year-over-year is a trailing metric. Lets say prices hit bottom 6 months ago, year-over-year prices will continue to show a decline for the next 6 months before starting to show gains one year after the bottom.
you can argue about the exact bottom, but all the *current* trends indicate that we past the bottom of the market in the last handful of months….
So all of a sudden it is OK to cite realtor.org and use them as a reliable source for news. I find it is best to really just discount everything they say. Also, that report is national, and while I won’t state that it has ‘nothing’ to do with the wider Bay Area, and micro San Francisco markets; I’d argue that the DQ/CS data are more relevant and interesting.
[Editor’s Note: By “all of a sudden” you mean within the past couple of years? And we’d agree with respect to the Case-Shiller Index and recorded sales data, which is why we publish them every month. But if you look, you’ll notice some similarities in the trends.]
“I find it is best to really just discount everything they say”
Absolutely.
In fact, their counts of sales and inventory has been broken since at least 2009. They were expected to unveil a revised methodology and data today, but did not.
“”In the near future”, the NAR is expected to revise down their estimates of existing home sales for the last few years. Tom Lawler wrote back in January 2011:
As many readers may recall, over the last year and a half I have noted numerous times that the NAR’s estimates for existing home sales appear to have understated the decline in existing home sales since 2006, with the “gap” increasing from 2007 through 2009. The basis for that assertion was that existing home sales based on property records in some key states declined materially more than did the NAR’s estimate of existing home sales in those states. In addition, CoreLogic’s estimates of existing home sales based on property records in its database (which covers “over 80%”of the US housing market) show materially larger declines since 2006 than do the NAR’s estimates.
The NAR is aware of these “discrepancies” and has been since at least 2009, but changing its methodology is not a trivial task. However, reportedly the NAR (working with others) has been looking into this issue, and is exploring whether it needs to change its methodology to get better estimates of “actual” existing home sales.”
http://www.calculatedriskblog.com/2011/11/few-comments-on-expected-nar-existing.html
And if they can’t even get the straight counts right in more then two years, how can you possible trust their seasonally adjusted numbers! And median’s aren’t prices, so the whole press release is basically destined for the circular file!
[Editor’s Note: While an adjustment to the methodology will likely change the numbers in the absolute, assuming NAR has been consistent in their error(s), we expect the relative trends to remain the same for the past couple of years.]
Who among us has not cast a stone at NAR?
https://socketsite.com/archives/2007/07/nars_new_new_national_forecast_yes_another_cut.html
https://socketsite.com/archives/2007/06/whoops_they_did_it_again_nar_revises_national_forecast.html
My personal disdain for NAR is up there with the Zestimate and anyone that uses Zestimates, or Zillow, for / as legitimate analysis.
“While an adjustment to the methodology will likely change the numbers in the absolute, assuming NAR has been consistent in their error(s), we expect the relative trends to remain the same for the past couple of years.”
My understanding is that NAR uses some benchmark period and then applies some calculated growth rate to that benchmark to estimate the numbers. So I’d expect that the error will be small for the benchmark period (somewhere in 2005-06) then grow from there. They have stated that the same error is introduced for both sales and inventory so they expect that the months of inventory ratio will be unchanged.
“My personal disdain for NAR is up there with the Zestimate and anyone that uses Zestimates, or Zillow, for / as legitimate analysis.”
I was skeptical at first that the Zestimate was just a marketing ploy, but they seem to be putting real work and more importantly real error analysis behind it.
They compare Zestimate to actual sales and report the error data
http://www.zillow.com/howto/DataCoverageZestimateAccuracy.htm
They show a 8.1% median error for SF. Having seen people’s guesses at sales prices on this blog and sellers idea’s of list prices I think that lots of folks are more then 8% off half of the time! And note that reported errors include all the homes for which they have bad data on sqft, bedrooms and other features. These data errors are easy to pick out for individual properties.
Also, they’ve recently taken to predicting upcoming case sheller releases and they actually follow up and compare their predictions to results. They’re predicting next month’s CS20 down 3.2% YoY, 0.2% MoM.
http://www.zillow.com/blog/research/2011/11/22/zillow-forecast-september-case-shiller-composite-20-expected-to-show-3-2-decline-from-one-year-ago/
Their last prediction:
http://www.zillow.com/blog/research/2011/10/25/as-predicted-case-shiller-august-10-and-20-city-composites-show-annual-depreciation/
Looking at their ZHVI index vs CS they seem to smooth out the highs and lows, but otherwise are pretty consistent.
I would conjecture that they are worse then average for high-end and very bespoke properties.